Malaysian new vehicle sales increased 21% year on year to 74,896 units in October 2023 from 61,920 units a year earlier, according to registration data released by the Malaysian Automotive Association (MAA).

October saw the market’s second highest monthly tally on record behind only the 78,849 registrations reported in March, despite the recent end of government incentives and the central bank having increased interest rates from 1.75% to 3% in the last 18 months.

Economic growth accelerated to 3.3% year on year in the third quarter from 2.9% in the second quarter. Domestic vehicle demand this year has been supported by new model launches, dealer promotions and an easing of supply chain bottlenecks after last year’s component shortages.

In the first 10 months of the year, the vehicle market was up by 12% at 646,840 units from 578,917 in the same period of last year with passenger vehicle sales rising 13% to 580,507 units while commercial vehicle sales were just slightly higher at 66,333 units.

Overall vehicle production in the country also increased by 12% to 640,613 units in this period.

The MAA said it expected the strong market momentum to continue in the final months of the year with full year sales now expected to far exceed its recently upwardly revised forecast of a record 725,000 units with sales now likely to exceed 780,000 units.

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The government recently announced a target for national brands Proton and Perodua to introduce locally assembled battery electric vehicles (BEVs) by 2025.

Deputy minister of international trade and industry (MITI) Liew Chin Tong said imported BEVs were currently exempt from import and excise duties to help drive up local sales but floor price of MYR100,000 has been set for imports to encourage local production of cheaper models.

Proton’s global sales rose 12% to 129,604 units in the first 10 months of 2023 including close to 1,700 exports. The Saga remained the brand’s best selling model with 57,806 deliveries year to date, followed by the Geely-based X50 compact SUV with 26,981 units.

The company launched its first hybrid model in May, the Geely based X90 three row SUV, but has been forced to recall the model to fix a wiring defect which has also caused production delays.

Earlier this year Proton said it planned to launch “at least” one locally made new energy vehicle (NEV) model per year in the future starting with a battery powered model later in 2023.

UMW Toyota reported a 9% sales increase to 87,422 units year to date, lifted by the introduction of the redone Vios compact sedan in March and the Innova Zenith in June which is available with a hybrid electric powertrain. Toyota officially launched the updated Yaris compact car in September and the new Alphard minibus last month. The company said it plans to launch the BZ4X battery-powered compact SUV by the end of the year.